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(NEWSBREAK)ALI VELSHI, CNN HOST, YOUR MONEY: Welcome to YOUR MONEY where we look at how the news of the week affects your wallet. I'm Ali Velshi.

CHRISTINE ROMANS, CNN HOST, YOUR MONEY: And I'm Christine Romans. Coming up on today's program job losses mount, unemployment rises, find out how it affects you whether you have a job or want one.

VELSHI: Plus the economic divide, Reverend Jesse Jackson joins us with his take on the credit crisis and how it is affecting the African American community.

ROMANS: Great conversation. And a life line for procrastinators. We are going to send it to you, we will have a tax attorney here to answer your tax questions and you don't have much time left. April 15th is the deadline. Have you done it yet?

VELSHI: No.

ROMANS: We have somebody to help you out personally.

VELSHI: Let's talk about something else. And saved by the unemployment rate. U.S. employers cut jobs for the third straight month.

ROMANS: And unemployment rate hits a three-year high. And whether you have a secure job or not and wanting to switch industries, or careers, these numbers matter to you.

VELSHI: And yes, to the entire economy. Allen Chernoff joins us now is here to break it down for us at an unemployment office. Allan.

ALLAN CHERNOFF, CNN CORRESPONDENT: Ali, you know we've been talking about whether or not there is a recession right now and the chairman of the Federal Reserves said possibly, well people who are out of work definitely feel like we are in recession and more and more people are out of work. Tens of thousands in fact, during the month of March, 80,000 jobs lost around the nation. That is a net number, including the number that actually was hired.

And since the beginning of the year, we have lost as a nation near one quarter of a million jobs. So you factor that in and the unemployment rate is 5.1 percent and this is far worse than economists had forecast and indeed the chairman of the Federal Reserve admitted this very week when he said that unemployment is likely to keep on rising and to go higher. So we may not technically be in a recession yet, but let me tell you, millions of Americans are sure that we are in a recession right now, and the jobs picture is the main reason why.

ROMANS: Allen, what are some of the economists telling me in their notes and in their sort of response to what happened on Friday, they are saying that the shift was so quick from last year to this year from job growth to job loss this year with 250,000 jobs you said in the first quarter gone. And there was so much help from the government job growth for much of the late last year as well and that also masks what was actual weakness as we were ending last year.

CHERNOFF: Indeed, Christine. If it hadn't been for government hiring in the past month, the nation would have lost 100,000 jobs. The only bright pictures we have got here is a little bit of hiring on the government side. Also, hiring in health services and as well leisure and hospitality, but construction, forget about it. Losing nearly 50,000 jobs. Manufacturing that is a long term decline, so many parts of the economy are shedding jobs, and unfortunately, that is likely to continue for the foreseeable future.

VELSHI: Allan, thank you. We will continue to break down this week's jobs report and what it means for the future of your job and your wallet. We are joined from Washington by Peter Morici, he a professor at the University of Maryland School of Business and I gave you a promotion, peter.

ROMANS: He is the president of something.

VELSHI: Well, here, we have Lakshman Achuthan managing director of the Economic Cycle Research Institute, and you two heard what we were talking to Allan about, when you look at these numbers the average person their job is their job so we are not entirely true what a loss of 80,000 jobs means or quarter of a million jobs in the beginning of the year, but Lach, why do we care about how many jobs are created or loss o lost in a month?

LAKSHMAN ACHUTHAN, ECONOMIC CYCLE RESEARCH INST: Well, this is a key mechanism that generates a recession. We have job losses and incomes go down and sales goes down and production goes down and this whole spiral, and what is a recession, and that is why the policy maker can't wave a wand and say it will go away. They have no control over this; it is the Achilles heel as it were of the free market economy.

This is a great system and this is the one weakness when the downward spiral gets under way. So even if you don't lose your job, and most people are working, right? This starts to impact you. Your psychology and you pull back a little bit and because you are a little weary and you are not as carefree as you were because you know somebody who lost their job, and things that are discretionary in particular come under pressure. The affordable luxuries. Your latte from Starbucks maybe a little too, too much of a frivolous thing right now and you go for the deli, coffee at the deli.

ROMANS: A couple of career experts were telling me earlier this week that this is not the time to be telecommuting everyday of the week and not the time to hang away. And this is the time to hang around the printer and talking to your boss and doing networking and making sure that you are seen. Let me ask you, Peter, if you have the job in your industry, what is the feeling out there about how much more job loss we are going to have and how deep it will be and are hiring managers are under a lot of pressure to cut the bottom 10 percent? What is happening out there?

PETER MORICI, UNIV. OF MARYLAND SCHOOL OF BUSINESS: Well, if we look at the job numbers in the context of the other numbers. Retail sales falling since Thanksgiving and industrial production has been slacking off. The only thing that is really strong right now is the government and those areas that tend to be more immune and in particular health care.

Right now the job market is poor. If you want to switch jobs, you will find that that 80,000 number is bigger than it look, which will mean it is hard to switch jobs or that it will improve your circumstances and negotiated position with regard to wages is very poor. If you are in certain segments of the economy like manufacturing here in these Bush years, manufacturing has shed 3.7 million jobs.

ROMANS: And those are good paying jobs, right, peter? The jobs that we are adding are like hotel workers and food services. So health care workers pay well, but some don't.

MORICI: Well, where are we losing them? Construction and manufacturing with which is where traditionally the front line workers go to accomplish middle-class status. It is a terrible situation.

ACHUTHAN: And you see what is pushing us and tipping us into recession and what happened right? We were cruising along, we were mottling along and what happened? Well, what happened is that the nonfinancial services sector which is like the secret weapon of the U.S. economy, where 5 of 8 of us work went into a sharp downturn so you are seeing in the numbers today and Friday's numbers that you are seeing that business services, and these are like really good solid jobs, we are losing those, and that is a big shift in the makeup of this jobs report.

MORICI: Well, Peter, I want to point out, if I can, this is not a natural dynamic in the economy. We have had a large and growing trade deficit in recent years and we have chosen to deal with it by having people borrow out of money to keep the consumption up, and the borrowing has run out and the banks have essentially collapsed and public policy has something to do with it. It is allowing lack of regulation in banking industry.

VELSHI: So since I have elevated you to president, tell us what the presidential candidates should do and what policy changes should we make at this point to help Americans down the road next year and two years and five years.

MORICI: Well, the best thing we can do is reducing the trade deficit and get the value of the dollar and the yen more balanced and if not, cancel the transactions. The banks can't go into the bond market to bundle the mortgages they made into securities because the fixed income investors don't trust them.

ACHUTHAN: And another aspect here is that everybody is focusing on what, what are you going to do? Give me more money or regulation and do that, so that is missing the point. The big issue here is timing. When a business cycle recession is eight months' long and the debate on what to do about it is six months' long, you missed the wave. OK. That is the issue.

These guys, and this is a nonpartisan comment, it is the administration and Congress and the Fed. Everybody dawdled when the turning point was occurring and as a result instead of preventing a recession and when recessions happen, things that are bad get worse. So housing downturn gets worse and companies on the edge that are going to fail, they tend to fail.

VELSHI: Right.

ACHUTHAN: So this is a very expensive waste of moment of time here.

VELSHI: It has to be done now.

ACHUTHAN: And yeah, the stimulus package is going to be a little blip where it could have avoided the recession, and now it does a gentle mitigation of it.

ROMANS: Bottom lines both of you, more job losses ahead? Will we see more job losses, Peter?

MORICI: Absolutely. We are headed for a very bad year. Bernanke was saying that perhaps we will have some negative growth the first half. We will have negative growth the first half, but the question is how much longer does this continues and if he can't get the banks fixed, we will have job losses through the year.

ACHUTHAN: Yes, and you have to look at the leading indicator and one leading indicator is stimulus and we see it pushing to the upside so eventually it will turn, but we need to see the corporate profits turn and housing development, and consumer and investment psychology improving.

VELSHI: And a point that Peter made earlier is that people turn to the consumer and manufacturing jobs to get themselves into the middle-class and we will come back later on with a specific discussion if you are in that industry, what do you have to look at.

ROMANS: And thank you.

Up next on YOUR MONEY a financial industry legend explains how to fix Wall Street, but maybe not fixing the current financial crises. We will be back with that.

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VELSHI: Well, it is the most ambitious overhaul since the great depression meant to modernize the banking oversight in this country and consolidating power in the Federal Reserve.

ROMANS: It will take years to enact and it doesn't address the homeowners today who are struggling to hang on to their homes. (BEGIN VIDEO CLIP)

HENRY PAULSON, TREASURY SECRETARY: Government has a responsibility to make sure that the financial system is regulated effectively. And in this area, we can do a better job.

ROMANS: A better job he says by streamlining an alphabet soup of financial regulators and merging the American Securities and Exchange Commission with the Commodities Future Trade Commission. Folding the office of thrift supervision to the Comptroller of the Currency. And creating SANCHEZ: new federal commission to oversee mortgages. Paulson's blueprint is careful not to advocate more regulation, but instead, updating a creaky system.

PAULSON: I am not suggesting that more regulation is the answer or even more effective regulation can prevent the periods of financial market stress that seem to occur every five to ten years.

ROMANS: Exactly why the critic say that the plan does not go far enough. The biggest complaint, it would give the Fed oversight of but not necessarily new power over investment banks like Bear Stearns, rescued by the Fed with taxpayer money.

DEAN BAKER, CTR. FOR ECOM. AND POLICY RESEARCH: The investment banks are still basically off of the hook. It is clearly not intended to be more regulation and if anything in some ways it can be seen as less regulation.

ROMANS: And it does not address the crises at hand today.

LAWRENCE SUMMERS, FMR. TREASURY SECRETARY: It is some exaggeration, but we have the had the financial equivalent to hurricane Katrina here and the right priority is not talking about the organization of regulation at this moment.

ROMANS: The proposal must be approved by Congress and could take years to become law.

(END VIDEO CLIP)

ROMANS: A lot of criticism that it won't help people right now, but it was never designed to do that and it started a year ago as an attempt led by Washington and by the financial industry to try to improve U.S. competiveness with the rest of the world, but one critic told me it looks like reform written by the bankers, Ali.

VELSHI: Yeah, and it does come out at a time when most Americans are hoping that the message coming from the federal government is could you do something to help me now and to help us understand what is on the table and frankly what you should do as investors and homeowners we are joined by John Bogle he is the found of the Vanguard Group and probably one of the best known names around and author of the book called the "Battle of the Soul for Capitalism," and John, good to see you and thank you for being on the show with us. Your initial views on this reorganization of the way we regulate financial services in the country. How big of deal should we make on this?

JOHN BOGLE, FOUNDER, THE VANGUARD GROUP: Well, it is extremely badly timed. We have a fire going on in the mortgage economy. Surely the financial regulatory system could have done more about it, but it will take years to implement this financial regulation and almost like a diverse their effort to throw out this 213-page blockbuster out there to take the market attention away from the real problem which is by and large on the financial side on mortgage instruments collateralized obligations and a dubious qualify and a large number of homeowners who are losing their homes, and that is the issue of the day and financial reform should take a back seat to that until a better time.

ROMANS: OK. John, talk about the issue of the day and you have been in if business for a long time and founder of Vanguard and rank this for me, as we see this, rank it in your personal experience in the economy and market?

BOGLE: Well, one interesting thing about taking the easy part of it which is the market. The market has taken all of this and the stock market has taken all of this with what I can describe as great equanimity and what has gone on in the last eight or nine months the stock market is 3 percent below where it was a year ago. Investors should be blessed to think that is all that has happened. There is decline from the high point to the low point of around 17 percent, but not everybody bought at the high or got out at the low, so the stock market seems to amble on. That concerns me a little bit, because I think that as part of the program said earlier, we are in for tough economic times.

VELSHI: Thankfully, John, people like you went and invented products where you don't have to wait around and hope. You have been a friend of the investor for a very, very long time. I think that most of the viewers if they have investments it is through the 401(k) or the I.R.A. And while it is the ups and downs of the Dow, they are not buying or selling on a regular basis, what is your advice to someone who might think themselves sophisticated but are concerned about the next year or two, and what is your best advice for them to make decisions with respect to their investments right now?

BOGLE: Well, my basic strategy is doing do something, just stand there. The reason I say that or the people I say that to are, and this is a critical distinction, Ali, and that is the distinction of the speculator and the investor investing in businesses and we have lost site of that because we are in a speck you la orgy where the turnovers of stocks in the U.S. is up to 280 percent a year and twice what it was in 1929 to the previous high year.

And so, I don't know what to say to a speculator. To an investor, however, the one I want to not do something, just stand there, if you are very diversified, own all U.S. business or maybe all global business on the equity side, but very broadly diversified so that sectors in the market and in this decline this sector of the market has been by far the hardest hit and also have a little anchor of windward in the form of a bond position.

For investors, small bond position, and for older and retired people, significant bond position and maybe 30, 35 percent of their total investments, and then weather the storm and hope and expect and I do expect that say in a ten-year time horizon and that is the time horizon that a investor and not speculator should be looking at, in that time horizon, we can be certain that the companies in the S&P 500 for example are going to be earning a lot more money then than they are today and that is what is going to drive the business results and drive the stock market returns.

ROMANS: John Bogle if you are correct, so many more people will be sleeping better tonight. John Bogle, founder of Vanguard thank you so much for joining us sir and have a wonderful rest of the weekend sir.

VELSHI: John Bogle has been right many, many times. You need a chance to pick up the latest book" Battle for the Sole Capitalism" it is a good read.

Coming up after the break help could be finally on the way for homeowners what you need to know about the proposed Senate housing bill. Coming up next on YOUR MONEY.

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ROMANS: Welcome back. Jennifer Westhoven is back with information on what is happening on the move in Washington about some sort of housing relief.

VELSHI: Yeah, I can't keep track with a million things going on in Washington, hearings and plans and this is a Senate plan and it has something to do with housing.

JENNIFER WESTHOVEN, CNN CORRESPONDENT: It is a Senate promise and they stood there and said, we will drop the party differences and get together and come up with a bill that helps homeowners. So here it is. Right. So this was a bill to help homeowners and if it becomes law, that means you could get a big tax credit to buy and fix up a home in foreclosure and local governments would get $4 billion the deal with the empty homes and they can become a crime risk and pull down the neighborhood prices, but much of the money seems to be for homes that are already lost. So yes, yeah, that might help the housing market overall, but does not help anyone who is trying to stay in their home and the bill has big tax breaks for corporations including the home builders.

ROMANS: I wondered home builders and people who overbuilt in the first place and some of the folks who helped us to get into the mess in the first place, they must love this?

WESTHOVEN: Well, that is a fair criticism and a lot of the homeowners' groups said what? What is in this bill for consumers and to help people?

VELSHI: Well, we are talking about people facing foreclosure or higher mortgage rates and one of the unintended consequences is food problems and people going to the food bank and increased use of food stamps.

WESTHOVEN: And let alone the sharply higher food prices that we are facing and all of the financial stress means a record number of Americans could be using food stamps to try to feed the families this year. This is a government report that forecasts 28 million people will be using food stamps to supplement their income by 2009. So this is really a sign that backs up the Fed chief's warning that maybe the economy is headed a recession. We see the prices for food and gas going up, up, up, while the job market and the housing market is getting worse.

ROMANS: Bad combination if you are trying to run a family budget or if your family budget is completely out of whack and trying to figure out how to make it work.

VELSHI: And if you are wondering about signs of recession all over the place, there do not seem to be signs of recession if you are trying to buy an iphone. I can't believe this story. I heard there were some shortages of iphones and people can't get them.

WESTHOVEN: Or they are on a waiting list, about a week long which in this day and age is long. A lot of the Apple stores say they are out of iphones which started a whole speculation, and where are they? So we know there is a shortage and there is some talk that maybe a new version is on the way, and that sort of gained a lot of Apple enthusiasts talking, but it seems that more analysts say that this is all about outrageous strong demand coming from outside of the United States, and that there are literally buyers going from store to store and they buy every iphone to get their hands on an resell them for a huge profit overseas. If you are outside of the company, you are not restricted to the AT&T network and you can hack around for a while and use it and the dollar is so cheap, it is a bargain.

VELSHI: And arbitrage on the iphone.

ROMANS: You have one?

VELSHI: I don't have one.

ROMANS: You have one?

VELSHI: have a pod.

WESTHOVEN: Not until the corporates get on devices.

VELSHI: Well, one for work and one for home, and two devises.

ROMANS: Yes, two devices.

VELSHI: Well good to see you Jennifer. Thank you.

ROMANS: I still have a typewriter. Coming up we will talk to Rev. Jesse Jackson about the 40th anniversary of the assassination of Martin Luther King Jr, a leader in the struggle for economic equality in America.

But first, this week, "Right on your Money."

(BEGIN VIDEO CLIP)

ROMANS (voice over): Buying life insurance can be confusing. Some policies have six terms and others can be adjusted each year. "Money" Magazine's Walter Updegrave suggests a bare bone approach.

WALTER UPDEGRAVE, "MONEY" MAGAZINE: For most people, the answer is a term policy, and that provides basic protection. There is no investment component it to, and the nice thing about this policy is that for a relatively small premium, you will get a large death benefit.

ROMANS: And when deciding what amount, of life insurance to get Updegrave says Web sites like lifeline .org and telecom.cin and lifeline.org can help you.

UPDEGRAVE: You go to put in the age and the type of policy you are interested in, and it will give you a list of policies with different premiums.

ROMANS: Keep your budget and priorities in check.

UPDEGRAVE: The idea with insurance is not to create a windfall if somebody should die, it is really to provide just enough protection so that the family can go on and maintain something close to their current lifestyle.

(UNIDENTIFIED MALE): "Right on your Money" is sponsored by the personal advisers of Ameriprise Financials. Go to CNN.com/rightonyourmoney to learn what is financially right for your lifestyle and for more tips on managing your money. Pick up any of these magazines on newsstands now.

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(NEWSBREAK)

ROMANS: This week marks the 40th anniversary of the assassination of civil rights leader Martin Luther King Jr. Dr. King's message center on social justice and economic equality for all Americans.

VELSHI: Today, that vision is threatened by the subprime mortgage crisis which is widening the wealth gap between blacks and whites. Joining us now is Reverend Jesse Jackson who is the founder and president of the Rainbow Coalition and he is outside of a hotel in Lorraine, Memphis, a place where Dr. King was murdered. And Rev. Jackson you were there on that day, you have followed this since that day, and you have said that the mortgage crises which you have been active in talking about is the greatest threat to African American wealth ever.

REV. JESSIE JACKSON, FOUNDER, RAINBOW COALITION: Well, it is not just African American, but it is certainly that. The open housing act passed in 1968, which was a breakthrough for fair housing, but a law passed must be enforced and funded. Here the fair housing, the lending laws are not in force. You are having bankers running amok running without regulation.

And then you have people who were victimized steering, and you have Attorney Jones from Alabama saying that blacks making $120,000 a year got steered into subprimes (INAUDIO). So to have them eligible for the subprime and got subprime, so the lack of enforcement on the law on the housing has cost like $250 billion in transfer of wealth because of the impact of this crises.

ROMANS: So what can we do about it? What you have seen out of Washington, have you felt as though you are seeing enough to address this? And quickly enough or are we going the see, you know, housing wealth be sapped from the community unless something is done more quickly?

JACKSON: Well, right now the focus is on stabilizing Wall Street and bailing out the lenders. There is no commitment yet to choose restructuring of loans over repossession of homes for example. If you had long term loans at a fixed rate, you could save many homes and therefore save the tax base. If I lose my house, seven houses are affected by that. So the tax base goes down, and then, when that happens in big numbers, you cannot fund public education, public health care and public transportation, and this recession has been driven bottom-up and not top-down and I hope that in Mr. Bush's wisdom, he would see the impact of restructuring the loans and of the families not just bailing out Bear Stearns and other companies, but both are important to you must be bottom-up and not top-down.

VELSHI: There is a lot of discussion, Reverend, about not rewarding people for bad decisions and those bad decisions were made in some cases by lenders and borrowers who were not as informed as they could have been and what is your best answer about why we have to be involved to do something that some might call a bailout?

JACKSON: Well, some who were speculating may have bought 10 or 15 houses, and we should not pay for speculators but basic homeowners who are truck drivers and teachers who trusted their lender and they got deceived, who we see left from redlining to reversing it to targeting communities for useless laws for useless lending patterns and in that case the Attorney General did not in fact protect homeowners from scams and schemes, of steering people eligible for prime and giving them subprime, a higher priced loan. And the target amount in a county in Georgia 15,000 homes in foreclosure and 3,000 of them losing value and that is all over the country and that is what must be addressed by the government.

ROMANS: That is right. At a panel at the Rainbow Coalition, that I attended recently Reverend Jackson and they said for everybody who has a house in foreclosure, their neighbors are losing $10,000 in value and it is not only hurting the speculators for those who are trying to get the American dream and build wealth and make a better future for the children. I want to ask you something, 40 years later, economic mobility project and bi-partisan assessment of where we are on the American dream recently found if you are middle-class and white in this country, your children have a 16 percent chance of falling out of the middle-class and if you are middle-class and black, they have more than 50 percent chance of falling out of the middle-class. What is happening in this country where that can still be allowed?

JACKSON: Well, Dr. King said there is not enough to be free and not equal, and not enough to pass a law and not enforce the law, and fund the law. So we see now a very violent patterns of structural disparities so if you are black or Latino kid or if the mortality rate is higher and the life expectancy is shorter and the unemployment is greater, within these cities jobs out and investment out, and drugs in, and guns in, and taxes up and services down, and first class jails and second class schools and we need therefore the big idea of restructuring and to bail out urban America and we did it in the '30s to bail out the depression and did it with the farmers in the 1980s with S&Ls in 1990 and these issues may be bigger than the economic crises and it is in our national interest to have a massive plan to restructure the loans and stop hemorrhaging the economy at the bottom. What is coming in at the hull of the ship where people are being violated and by the millions?

VELSHI: Reverend Jackson, always a pleasure to talk to you and thank you for being on our show. Reverend Jesse Jackson founder and president of the Rainbow Coalition outside of the hotel in Memphis where he was standing 40 years ago when Martin Luther King Jr. was assassinated.

ROMANS: Coming up on YOUR MONEY how to reposition your career if you work in an industry that happens to be cutting jobs.

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VELSHI: Now looking at some of this week's top stories. The numbers of individuals filing for bankruptcy surged in the first quarter of 2008 as American families struggle with debt and mortgage problems. The American Bankruptcy Institute reports that American consumer bankruptcy filings are up 27 percent from this period last year. March alone more than 86,000 people filed for consumer bankruptcy which is a 13 percent increase from February.

ROMANS: Thirty one percent of domestic flights in February did not arrive on time due to cancellations, diversions or delays according to transportation department data released this week. The results show a slight improvement believe it or not from a year ago in 2007 when 33 percent of flights arrived late. This is the worst month on record for the airlines.

VELSHI: And a rough month as well as ATA Airlines filed for bankruptcy and completely shutdown this week. The low-cost airline says that the shutdown is a result of financial troubles following the loss of a key contract for the military charter business. The Indiana- based service hubs of Chicago and Atlanta and also destinations like Hawaii and Phoenix and Las Vegas. ATA employed 2200 pilots and flight attendants and mechanics.

ROMANS: Ouch for them. VELSHI: And as the U.S. flirts with session, many Americans are worried about saving their jobs, and that is just a few of them.

ROMANS: That is right. Those working in industries could be particularly vulnerable to job cuts like manufacturing or construction; you may want to take steps to help ensure the future of the career. Brad Karsh of Jobbound a job prep service he joins us now. Brad, thank you for coming back. We want to talk about recession- proofing your careers. And there are some areas when you look at the lists of job losses that look particularly vulnerable.

VELSHI: Take a look at it. Manufacturing jobs, Brad, we were looking at this and we have a map to show you that in 2007 only six states in the United States actually added manufacturing jobs. And they are not the ones that you would think they would be. We have Washington, Nevada, Utah, Nebraska and Kansas and Louisiana. We are not seeing growth in manufacturing jobs.

BRAD KARSH, FOUNDER & CEO, JOBBOUND: Absolutely. And it is tough for those people who are working in the industry, because they are going to have to come up with some other options if they want to stay gainfully employed.

ROMANS: What are the options? I mean, it is changing so quickly in the construction and the manufacturing sectors that it is changing much more quickly than people can change and retrain and move and uproot their lives to find new jobs in new geographical locations.

KARSH: Yes, and it is never easy so there are a couple of things that people can do and one is that you have to think about, and some of the things I will talk about requires flexibility and maybe require taking a pay cutting, but if you want to stay related to the industry, there are things you can do. So for manufacturing for instance if a lot of the jobs are going overseas, maybe you would consider going overseas and that is not an option for everyone, but certainly some people can consider that. And another thing to do is to consider staying here, but instead of working in the actual production of the product, now talk about the repair of the product.

ROMANS: Yes.

KARSH: So as more and more and it is not like the absolute number of things you manufactured is going down, but that the jobs are leaving the country and still the need here to repair those. If you were working on creating those for so many years, you can help to repair it conceivably.

VELSHI: And I know an autoworker laid off at Ford used to be a paint guy so he opened up a paint shop, that sort of thing.

ROMANS: But moving overseas and huge Chinese factory is taking over for parts of the industry here, is not that you can move to China and get .30 an hour I don't think.

VELSHI: What about the other area, Brad that we are seeing job losses in, and that is construction. KARSH: Yeah, tough. New home sales as we know are going down, but the fact of the matter is that when new home sales goes down, remodeling goes up. People staying in the house longer and more need for repair and sprucing it up. So if you work for a big company, and Toll Brothers if you will, consider moving into remodeling and there are not a lot of huge companies a la Toll Brothers, but maybe it is time to work for a small business doing remodeling things. Another thing to consider --

ROMANS: Oh, go ahead.

KARSH: Another thing to consider is sales. Home depot looking for sales people. Industries like that tend to go up when new home sales go down and the other option is to sell the products that in essence you were using. You have an insider's point of view on that stuff and you used the drill bits for so many years and now you can sell them.

VELSHI: Brad Karsh thank you so much for being with us. Thanks so much for being with us. Brad Karsh is president and founder of Jobbound and to the point that what he was saying there are a lot of options besides moving overseas and we should have it noted that is how grim that situation is. There are six states where there are manufacturing jobs increased in 2007, so if you are holding out for the return of manufacturing jobs in America, I would not hold my breath. Moving to another country seems almost more practical.

ROMANS: And in the big picture issues education is that much more important and you have to go and be trained for something. A lot of people are talking about plumbing jobs and lock smith jobs and jobs like that where you can get an apprenticeship and certification and have a good career, but things are definitely, definitely changing out there in the economy, and you know, it is tough to get a student loan right now because of the credit crunch, so how are you supposed to -- well, I don't know.

VELSHI: We will try to keep you posted on the whole thing. We will keep you posted on the whole thing. We are going to take a quick break. Coming up next on YOUR MONEY the April 15th tax deadline.

ROMANS: Ali, you have to do it this weekend and walk out of here and finish.

VELSHI: I will e-mail YOUR MONEY and get some questions answered. Up next.

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VELSHI: You know, my mother is going to watch this and say, you have no business telling people about filing your 2007 tax return as April 15th is rapidly approaching and she will say, do you know that you say this stuff and you never get your taxes filed on time? Well, you take it over.

ROMANS: I will make sure she gets them done this weekend for sure.

VELSHI: And you will make sure that I don't get hit with -- ROMANS: Steep penalties and fines and filing, you know, late and extensions and all of that stuff. Last week we asked you the send in the tax questions, and we got an awful lot of e-mail.

VELSHI: AT least 50 percent of them worked for me.

ROMANS: We will get right to the tax questions right now with the tax expert Dan Pilla author of the "IRS Problem Solver."

VELSHI: I have a question here from Pamela and it is a good question from Minnesota, and she says would you explain the tax implications of the stimulus money we will be receiving and is it advancements of 2008 taxes or it is taxable or free money?

DAN PILLA, AUTHOR, "IRS PROBLEM SOLVER:" Well, you are getting back your own money so in that since it is free money, it is certainly not taxable and a rebate of the tax you have paid. But what the stimulus does is to take the lowest tax bracket which is 10 percent on the first $6,000 of income and eliminates that bracket and essentially eliminates to zero so that the $600 that you would have paid on that income is coming back to you and that is where it is coming from.

VELSHI: So you don't have to pay it back and not coming off of the next tax return, this is clean money?

PILLA: Correct.

ROMANS: And I'm a retired U.S. citizen and I would like to file a stimulus tax return. I have two dependent daughters. One is going to college and one will graduate from high school this year. I know I can claim the young daughter on my tax return, the other daughter is still attending college but both live with me and I pay for their entire support. Please inform me how to claim both of my daughters on the tax return and be eligible to do so.

PILLA: Well, they are both dependent exemptions. Your stimulus will increases for the depending exemptions you have, I believe it is $300 per dependent, so in this case if you have two daughters that living at home and providing 100 percent of the support, and as long as the one in college is under 24 years of age and not earning income, she is independent exemption and that will increase the rebate.

VELSHI: One more from Robin in Wisconsin, I have back taxes that I am paying off monthly and when I am closer to paying off the balance it is worth going to the IRS and trying to negotiate a lower payoff and any tips to do that so they will be receptive because the interest and penalties are killing me?

PILLA: You know what I have heard people say that a thousand times it is the penalty and interest that kills me and a as a matter of fact IRS statistics show that the typical tax bill increases by about 270 percent as a result of penalty and interests, so what this lady needs to know is that every penalty provision in the tax code has a good faith or reasonable good faith cause so if you acted in good faith and reasonable cause for your actions not out a deliberate attempt to cheat or deceive the IRS, the penalties don't apply. So there is a chapter in my book "IRS Problem Solver" will show you step by step to do this. What you do is you make an application in the form of a letter for the abatement of the penalties and set forth facts in the letter to allow the reader to conclude that you acted in good faith and didn't cheat on purpose and the IRS will consider those facts and you have an excellent chance they will cancel them.

VELSHI: And you do? You think there is a good chance?

PILLA: Oh, there is no question about it. Yeah, this is one area where I have had tremendous success in the 30 years as a tax litigation consultant and we have had tremendous success in getting rid of the penalties and interest on penalties.

VELSHI: A guy like you makes me feel like I should file my tax return. Dan Pilla is author of the "IRS Problem Solver" and I on the other hand is the IRS problem.

ROMANS: Up next, the parent that plays the guitar but would never pay the bills. And some savvy investors are proving their parents wrong. We will explain next.

(COMMERCIAL BREAK)

VELSHI: All right. So you may have give own up on the dream of being a rock star, but you haven't given up the old guitar yet. Actually I have an old guitar from those days when I thought I would be a rock star.

ROMANS: Smart move. That guitar is far more than a link to your long, long ago youth, Ali. It may be the most sound investment you got in the shaky economy.

(BEGIN VIDEO CLIP)

ROMANS (voice over): Stock market turmoil, a weak dollar and growing concerns about inflation. Shaky times, but Rudy Pensa owner of Rudy's Music Stop in New York City is not exactly singing the blues. He buys and sells new and vintage guitars. He says that business is strong even though the economy is not.

RUDY PENSA, OWNER, RUDY'S MUSIC STOP: Being in the business for 30 years, I found out that when the stock market goes down or whatever, people, the collectors buy more instruments, and it is basically a very secure investment, especially if it is a very good condition and very good to hear.

ROMANS: Jobs like Penza's and trade shows like the one we visited in Jersey are fuelling the vintage guitar market. According to the vintage guitar index which tracks the value of 42 classic models prices have steadily increased since 1991. For most of the one of a kind and limited edition guitars, prices have remained high. But for less rare models, prices have leveled off over the last nine months and in some cases dropped.

LARRY MEINERS, COLUMINIST, "WOOD STREET VS WALL STREET:" I am not sure if I understand exactly why, if it has something to do with the mortgage mess or the debt market. You have something that is super rare, super high end, tier one, excellent condition, 100 percent original, the market is still robust. For other guitars, you have to be really careful.

ROMANS: Penza says that the prices can give investors with a stronger stomach a buying opportunity.

PENZA: Right now in the next six months and in another year or two, it won't be anything available for, you know, for the price that is this affordable.

ROMANS: But the financial planners warn investors about getting into the game, especially if it means pulling them out of traditional retirement investments.

DOUG FLYNN, FLYNN ZITO CAPITAL MANAGEMENT: It should be a small percentage because you don't know exactly what the payout will be there and you have to be at some point is able to part with it and if you are truly an enthusiast you might not be able to part with the things that are worth the most.

ROMANS: Flynn says no more than 5 or 10 percent of the cash should go toward hobby investments. Pensa says he senses concern from his customers about their money and financial security.

PENSA: I have never seen so many nervousness of the customers. Does that mean they will buy expensive guitars? I don't know.

(END VIDEO CLIP)

ROMANS: One thing that is so interesting about it is that the investors play these very, very valuable guitars and use them. Experts say as long as they don't scratch them or nicked or scratched in any way it doesn't hurt the value and you can't play with the mutual funds.

VELSHI: Interesting point that you collect them and it is a liquid investment if you are not prepared to sell it.

ROMANS: And it is like art or cars --

VELSHI: Yes, cars.

ROMANS: And you have to love it and love it and know why you have it. I couldn't go out to buy a vintage guitar, because I am afraid to make a terrible choice.

VELSHI: And I would dent it and scratch it.

ROMANS: You know how the play?

VELSHI: Well, I tried to learn. Guitar hero I can play. Well, thank you for joining us for this edition of YOUR MONEY.

ROMANS: We will see you back here next week Saturday at 1:00, Sunday at 3:00. See you then.

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